How to Manage Your Credit

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Establishing and maintaining good credit is easier if you know what’s in your credit report. Get a free copy of your credit reports every year and quickly correct any errors. Managing your credit also involves understanding how your credit score is calculated and how you can increase your score. If your credit is in trouble because you’re overextended or behind on payments, you have strategies at your disposal to help get back on track.

Contacting the Big Three Credit Bureaus

Examining your credit reports closely is important because the reports often contain errors, and those errors can affect what interest rates you receive, what jobs or promotions you get, and how much you pay for insurance. You want to correct any erroneous, incomplete, or out-of-date information as quickly as possible. Reviewing your credit reports regularly also helps you spot identity theft early. Here’s the contact info for the big three credit-reporting agencies:

  • Equifax, P.O. Box 740241, Atlanta, GA 30374; phone: 800-685-1111; website: www.equifax.com
  • Experian, P.O. Box 2104, Allen, TX 75013-2104; phone: 866-200-6020; website: www.experian.com
  • TransUnion, 2 Baldwin Place, P.O. Box 1000, Chester, PA 19022-1000; phone: 800-888-4213; website: www.transunion.com

You’re entitled to a free copy of your credit report each year from the three major credit bureaus — Equifax, Experian, and TransUnion. Whether you get a copy from one bureau every four months or all three at once, you can order your free annual reports from the Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281; phone 877-322-8228; website www.annualcreditreport.com.

How to Handle an Overdue Mortgage

Falling behind on your mortgage payments can put you in a financial bind and, worst-case scenario, can lead to foreclosure. If your mortgage is late, you need to take immediate actions. Fortunately, you do have options to help you if your mortgage is past due. Here are some ideas to consider:

  • manage your creditCall your lender or servicer immediately if you’re going to be late. The worst thing you can do is nothing. After you’re late, your grace period disappears, so a foreclosure action may be two weeks closer than you think.
  • Contact a HUD-certified counseling agency for more options. (Go to www.hud.gov or call Project HOPE at 888-995-4673). A HUD-certified counselor can advise you for free, help you with your mortgage servicer, and refer you to local resources that you may not know about.
  • Don’t allow your mortgage to become 90 days past due. Partial payments may not be accepted after 90 days.
  • Think twice about strategic default. If you owe a great deal more on your mortgage than your home is worth and are considering walking away from your home, research all the negatives before mailing in your keys.
  • Find out your alternatives to foreclosure. Find options at www.ftc.gov/bcp/edu/pubs/consumer/homes/rea04.shtm or http://portal.hud.gov/portal/page/portal/HUD.

The Mortgage Forgiveness Debt Relief Act of 2007 has conditions that expire after 2012, and not everyone is eligible. However, if you qualify, you and your spouse can avoid taxes on up to $1 million of forgiven mortgage debt. No one wants to pay taxes if he doesn’t have too! You can find more information on this important act for homeowners at www.irs.gov/individuals/article/0,,id=179414,00.html.

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